Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data

@article{Allegretto2010DoMW,
  title={Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data},
  author={Sylvia A. Allegretto and Arindrajit Dub{\'e} and Michael R. Reich},
  journal={Labor: Human Capital eJournal},
  year={2010}
}
Traditional estimates of minimum wage effects include controls for state unemployment rates and state and year fixed-effects. Using CPS data on teens for the period 1990 – 2009, we show that such estimates fail to account for heterogeneous employment patterns that are correlated with selectivity among states with minimum wages. As a result, the estimates are often biased and vary with the source of identifying variation. Including controls for long-term growth differences among states and for… 

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TLDR
There is a wide range of existing estimates and, accordingly, a lack of consensus about the overall effects on low-wage employment of an increase in the minimum wage, but the oft-stated assertion that recent research fails to support the traditional view that the minimum Wage reduces the employment of low- Wage workers is clearly incorrect.

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